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Developing business plans & practices Eric & Joanna Reuter Chert Hollow Farm, LLC.

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Presentation on theme: "Developing business plans & practices Eric & Joanna Reuter Chert Hollow Farm, LLC."— Presentation transcript:

1 Developing business plans & practices Eric & Joanna Reuter Chert Hollow Farm, LLC

2 General principles & goals - Minimize debt, expenditures & off-farm inputs - Base management & income on natural resources - Use diversification to manage work & risk - Experiment, record, and learn - Plan & farm for the long-term - Maintain an attractive & well-kept farm - Make a living from the land and enjoy it - Maximize self-sufficiency, especially in food

3 Working with what we have PROS: - Rich bottomland soil - Isolation & protection - Good timber - Good potential pasture - Reliable county water CONS: - Limited good, flat soil - Degraded upland soil - Little infrastructure - Restrictive microclimate - Difficult access

4 Chert Hollow Farm overview -Certified Organic vegetable farm -Primary focus: 200 varieties of produce -Includes smaller amounts of fruits, grains, & herbs -Secondary focus on farm & home production -Dairy & meat goats, chickens, swine, and timber -2011-2012 transition from farmers market to CSA program

5 Farm for profit, not production -Plan all activities around net/gross ratio -Farm 1: $50,000 - $45,000 = $5,000: 10% -Farm 2: $10,000 - $5,000 = $5,000: 50% Who can expand/meet goals more easily? -Net goal $30,000: -Farm 1 needs $300,000 gross -Farm 2 needs $60,000 gross -Plan for long-term needs Efficiency matters; the less you spend, the less you have to earn

6 Choosing management - What methods will you use, at what cost? - Reducing off-farm inputs, and closing loops, is very effective at saving money - Records help identify hidden costs & labor - For us, Certified Organic helps with these goals -Records become a planning tool -Methods limit off-farm inputs -Closed loops save money -Justifies higher prices

7 Management examples -Plan crop/animal rotations to fit more into area -Consider cyclical on-farm inputs -Saving cover crop seed -Start a manure herd -Grow winter forage for livestock/poultry -Analyze labor & material choices

8 Choosing methods & inputs -Think efficiency -Consider costs of any methods/inputs -Run tests of different methods/inputs -Consider whole-year results, not per-crop -We chose mostly manual methods -Cheaper & more reliable -Less weather-dependent -Allow intensive growing -Quality of life -However -Time & labor-intensive -Limits some crops

9 Methods examples: -Tomatoes: in a 4 wide bed, we tested 1 row vs. 2 -In theory, two rows gives more yield & more income, though with more cost -In practice, single row plants seemed healthier, larger, and more productive, with lower costs -Edamame: in a 2.5 wide bed, we tested 1 or 2 rows at plant spacings from 2-8. -2 rows (12 apart) yielded more and shaded weeds, though tight spacings hurt. Ideal method for us is 2 rows with 6 spacings.

10 Analyzing space, yield, time, and income together -Consider one 100 bed for summer & fall (using Johnnys yield data per 100) -Zucchini 200lb x $2/lb = $400, July onward -Leaving zucchini alone may mean no fall crop; removing in mid-August allows for fall crop: -Zucchini 100lb x $2/lb = $200 PLUS -Fall greens (kale, collards, mustard) 75lb x $8/lb = $600 -Which is better, $400 or $800? -You can still keep zucchini going through frost by planting other beds later, after mid-summer crops like garlic come out. -Efficient space use & willingness to move on can effectively raise yields & income

11 Choosing products -Consider more than customer popularity -Labor & input needs -Harvest & storability -Market presence & competition -Sales ceiling -On-farm viability -Loss leaders are fine, if intended

12 Products examples -Sweet corn -Popular, but not lucrative - needs equipment. We dont grow it for sale because we can get more money elsewhere. -100row yields ~100 ears x $.50/ear = $50 -Slicer tomatoes -Easiest crop for gardeners and everyone grows them. Market is always swamped at peak and customer appreciation is relatively low. We dont grow many for market. -100 row yields 150lb x $3/lb = $450 -Herbs -Lucrative in small amounts, but hard to scale up, and need to be very fresh. We dont overdo it with these. -Garlic -Low pest pressure & input needs, most work comes during non-peak times, stores well. We grow lots. Still has a ceiling. -100 row yields 300 heads x $2/head = $600

13 Using on-farm resources - What do you have on-hand to close loops? - Chert Hollow: - limited open land, lots of timber - on-farm logging creates value & saves money

14 Labor needs -How to pay? -IRS allows farm non-cash payments, no witholding -Liability -Volunteers/interns/visitors can be forced to sue you -Internship rules -Government requires internships to demonstrate education links, & more -Otherwise may run afoul of labor laws

15 Risk Management Uncertainties/risks -Climate/weather, disease/pest threats -Changing regulations (food safety, etc.) -Customer demands, competition -Contamination of crops (pathogens, long-lived herbicides, govt sprays) -Lawsuits -Injury/illness Responses -Diversified crops & adaptable methods -Pay attention, have alternative plans, member of Farm to Consumer Legal Defense Fund -Research, test, innovate, market -Organic methods and certification -LLC, liability insurance (?), document attention to safety -Health insurance, safety conscious

16 Diversity -Market diversity -Draw in many types of customers -Ecological diversity -Consider disease, nutrient use, & ecosystem -Income diversity -Multiple income streams buffer the unknown -Labor diversity -Spread workload over more time & tasks

17 Agritourism - Attract, educate, & impress customers - Charge a fee to attach value to your time -New income stream -Gain feedback & ideas -Promotes openness

18 Time management - Always consider the value of your time - Ask Whats in it for me? - Assess relative uses of time - Going to market takes two days; will I make enough to justify that? - 2 ten-hour days: 20hr x $8 = $160 - Plan around core principles

19 Business plans are dynamic - Continually assess, revise, and adapt as needed - Deeply tied to individual circumstances - Conditions on the ground - Skills and interests of the farmer - Resources available - Every farm should have a different focus, resulting in an effective whole

20 Thank you Questions?

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